The number of real estate transactions involving cryptocurrency—such as bitcoin and ethereum—have been on the rise, but a real estate brokerage in New Jersey wants to take digital transactions one step further.
One of its agents, Manuela Londono-Osorio, recently accepted her commission check from the brokerage in the form of cryptocurrency. New Jersey Broker Luis Leiva says this is just the next step for what the brokerage plans to do by the end of the year: complete a transaction in which every party—seller and agent—would be paid in cryptocurrency.
Transactions between buyers and sellers using bitcoin have been growing, but Leiva says he believes his brokerage is among the first in the U.S. to pay one of its agents using digital currency.
Londono-Osorio’s real estate transaction was a traditional one involving an investment property, in which U.S. dollars were exchanged for the property. However, once the brokerage received its portion of the funds, they allocated Londono-Osorio’s commission into her cryptocurrency wallet, in which she could then convert to bitcoins, ethereum, or the crypto of her choice. While a commission check may have required a few days to receive funds, Londono-Osorio saw the funds instantaneously deposited into her cryptowallet, one of the benefits she says of transacting with digital currencies.
Certainly, cryptocurrencies come with some risks, as their values can fluctuate widely. The currencies are only as valuable as investors are willing to pay for them at that moment.
However, Londono-Osorio is not a stranger to that risk. She started investing in cryptocurrency as a sophomore in college in 2014. At first, she invested $1,000 on a whim because other classmates were. She was not certain if anything would ever come of it. Her initial investment peaked in the middle of December 2017 at $40,000. The investment has fluctuated greatly ever since, but that has not deterred her from wanting to stay in.
“Initially I didn’t understand the technology behind it,” Londono-Osorio says. “As more individuals join this community, I see this type of currency coming into real estate in a bigger way. Our brokerage wants to be an innovator in this space, and we have an opportunity to shine more light on the capabilities of cryptocurrency in the transferring of funds.”
The next step, Leiva says, is to complete a full cryptocurrency transaction by the end of 2018, the brokerage’s goal. “This is something we’re working on now,” Leiva says. “We want to be on the forefront of this.”
Leiva also plans to offer cryptocurrency commissions to any other sales associates in the office, if they so choose. “We are showing you really can conduct business with bitcoin or cryptocurrencies,” Leiva says.
Paving the Way for a Blockchain
The growth of cryptocurrency is all part of the process of taking real estate transactions onto a blockchain, touted for its potential to one day revolutionize the real estate industry by digitizing the entire process and allowing all parties more seamless access from everything to title deeds and funds.
Earlier this year, South Burlington, Vt., announced it was partnering with real estate startup Propy Inc. to run a pilot project, using blockchain technology to digitize estate transactions and making them speedier to process.
Other recent announcements are hoping to foster the era of blockchain in a bigger way within the real estate industry. For example, ShelterZoom, a blockchain-based real estate online company, announced that by the second quarter of this year, it will be offering a real estate industry cryptocurrency payment option.
ShelterZoom’s Offer Now wants to streamline the process of making and accepting real estate offers online. It will offer buyers, sellers, renters, and landlords the ability to use a cryptocurrency payment option. Ether (ethereum’s cryptocurrency) will be accepted first, but the firm plans to add other crypto payments options later on.